Telangana’s 12-year growth story faces headwinds

Secretariat Dr. BR Ambedkar Telangana is illuminated in the colors of the Indian tricolor on the eve of Telangana Formation Day in Hyderabad on Monday (June 1, 2026). | Photo credit: SIDDHANT THAKUR

Immediately after the creation of independent Telangana, the state faced one of the worst droughts in recent memory. The cultivated area decreased, the production of food grains and cereals dropped to a minimum. Agriculture and the allied sector recorded a negative growth of -1.1%. Agricultural crops registered a negative growth of -13/3%. In 2014 the average rainfall was 68.2 cm, in 2015 it was 68.9 cm against the normal of 90.5 cm.

It was after these two challenging years that Telangana rose like a mythical phoenix to create a success story that continues but faces headwinds at the same time.

A dozen years is a very short time to assess the progress of a state. But when the creation of the state was worked on for decades and was born on June 2, 2014, then the assessment is very good. In these 12 years, data collected from various sources shows how Telangana has jumped in economic and infrastructural indices, but faces challenges in the social and health sectors.

From the drought year 2014-15 when food grain production was 10.69 lakh metric tonnes to 236.87 lakh metric tonnes is just one aspect. The irrigated area also increased from 62.46 lakh acres to 74.51 lakh acres.

However, Telangana’s growth story has been driven by the services sector and not the agriculture sector, whose contribution has fallen to 18% of Gross State Value Added (GSVA), which measures the value of goods and services in the state. The services sector contributed 61.3%. At the time of the establishment of the state, 26.6% were employed in the service sector. Now that number is 33%.

This growth in the service sector led to a jump in the state’s per capita income, albeit with huge differences between districts closer to the capital and those further away. The most dramatic growth is in per capita income, which jumped 171% from ₹1,24,104 in 2014 to ₹3,36,898 in 2025. However, this has not translated into higher investment in education. As a result, the total number of government schools increased marginally from 29,427 to 30,057. And this at a time when the total number of students increased by 13.4% from 65,73,100 to 74,57,851.

Maternal mortality decreased from 88 in 2014–15 to 43 in 2025 and infant mortality decreased from 34 in 2014–15 to 18 in 2025. This is due to increase in health expenditure from ₹4519.56 crore in 2015 to ₹925.93 crore in 2015.

This growth story from poor drought years to one of the top grain producing states was not easy. A change is underway from a predominantly agricultural state to a service sector powerhouse. But Telangana’s growth story is likely to face headwinds as AI is adopted by businesses across the board, which may impact the services sector. And then, the same old bugger of the Indian monsoon lurking around the corner again: El Nino.

Published – 1 Jun 2026 21:07 IST